Pioneer changes debt scene

WHENEVER you think of credit management and debt collection the first thought that springs to mind probably relates to a small practice where the operator of the business is camped outside the door waiting for your arrival so as to collect the dollars you owe someone.

However, this concept of a small business operating in an industry of small players is about to be radically changed.

Pioneer Credit Management Services is likely to create a formidable presence in the industry.

In April, Pioneer announced a merger-listing plan involving the creation of one large conglomerate from sixteen industry participants and a backdoor listing through Frontier Petroleum.

The merger will bring together ten participants in Australia and six in New Zealand to trade as Receivables Management.

The information business arm of this entity will operate under the banner of Creditnet International.

The merger is interesting from a number of points of view.

Given the ease with which credit has been available in recent years and the potential for continued interest rate rises in the next few years, it would seem that the timing of this development could not have been better.

We are now in an era when being in debt does not hold the stigma it once did and debt collecting is big business.

In fact, it seems opting for bankruptcy is almost the ‘done thing’.

The rationale behind the Pioneer merger seems to be the requirement for an integrated, and all-encompassing, service to existing and potential new clients.

Additionally, the merged operations will have representation internationally and will add a dimension to receivables management that has been absent from the market – worldwide management of credit.

l Economist Suresh Rajan is a director and proper authority holder with Smith Martis Cork and Rajan – financial planners.